vbg group interim report january–september 2019

VBG GROUPINTERIM REPORTJANUARY–SEPTEMBER 2019

SEK 109 MOperating profit for the third quarter increased to SEK 109.4 M (107.3).

SEK 909 MConsolidated sales for the third quarter increased to SEK 909.1 M (874.8).

VBG GROUP INTERIM REPORT JANUARY–SEPTEMBER 2019

1

Third quarter of 2019:• Consolidated sales increased by 3.9% to SEK 909.1 M (874.8).• Operating profit rose to SEK 109.4 M (107.3), with a margin of 12.0% (12.3).• Profit after financial items amounted to SEK 103.9 M (100.9), with a profit margin of 11.2% (11.5).• The Group’s profit after tax amounted to SEK 73.7 M (71.2).• Earnings per share amounted to SEK 2.95 (2.85).• Restating in accordance with IFRS 16 had a positive impact on operating profit of SEK 0.7 M.

Nine months 2019:• Consolidated sales increased by 9.7% to SEK 2,878.1 M (2,623.7).• Operating profit rose to SEK 368.2 M (329.7), with a margin of 12.8% (12.6).• Profit after financial items amounted to SEK 335.2 M (292.0), with a profit margin of 11.6% (11.1).• The Group’s profit after tax totaled SEK 245.9 M (212.5).• Earnings per share amounted to SEK 9.83 (8.50).• Restating in accordance with IFRS 16 had a positive impact on operating profit of SEK 1.9 M.

INTERIM REPORTJANUARY–SEPTEMBER 2019

KEY FIGURES

Group, SEK M Q3 2019 Q3 2018 9 months 2019 9 months 2018 Full-year 2018

Net sales 909.1 874.8 2,878.1 2,623.7 3,492.4

Operating profit before depreciation/amortization (EBITDA) 137.4 127.4 451.7 389.1 497.4

Operating profit before amortization (EBITA) 117.3 115.2 392.2 353.5 449.3

Operating profit (EBIT) 109.4 107.3 368.2 329.7 417.6

Operating profit after financial items (EBT) 103.9 100.9 335.2 292.0 373.1

Profit after tax 73.7 71.2 245.9 212.5 273.0

Earnings/loss per share, SEK 2.95 2.85 9.83 8.50 10.92

Cash flow from operating activities 218.8 97.0 317.0 207.0 253.6

ROE (cumulative), % 14.0 13.4 14.0 13.4 12.8

ROCE (cumulative), % 14.1 14.0 14.1 14.0 13.2

Equity/assets ratio, % 55.8 54.9 55.8 54.9 56.7

Interest-bearing net debt/EBITDA — — 1.27 1.45 1.30

Average number of employees 1,612 1,608 1,636 1,554 1,561

Average number of shares during the period 25,004 25,004 25,004 25,004 25,004

Number of shares outstanding 25,004 25,004 25,004 25,004 25,004


2

1 ,600 EMPLOYEES

31 WHOLLY OWNED

COMPANIES

18 COUNTRIES

THIS IS THE VBG GROUP

VBG Group AB (publ), domiciled in Vänersborg, is the Parent

Company of an international engineering Group with wholly

owned companies in the USA, Canada, India, Brazil, China,

Australia, South Africa and nine countries in Europe. The

Group’s operations are divided into four divisions: VBG Truck

Equipment, Edscha Trailer Systems, Mobile Climate Control

and Ringfeder Power Transmission – with products that are

marketed under strong, well-known brands.

VBG Group AB’s Series B share was introduced on the stock

exchange in 1987 and is listed today on the Nasdaq Stockholm

Mid Cap list.

Vision

We are number one or two globally in the industrial niches in

which we are active. We make a difference by creating the

products and services of the future.

Business concept

The VBG Group will, within selected product and market

segments, acquire, own and develop industrial companies in

business-to-business commerce with strong brands and good

growth potential. Based on a long-term commitment and with

a focus on growth and profitability, the VBG Group’s share-

holders will be offered attractive value growth.

Goals

• > 10% in average annual sales growth over a five-year

period, of which 5% attributable to actual organic growth

and 5% to structural growth.

• > 12% in average operating margin (EBIT) rolling five years.

Strategies

The Parent Company, VBG Group AB, is responsible for the

strategic governance of the Group as a whole, which entails

the approval and follow-up of divisional targets and strategies,

providing support in the form of industrial expertise and iden-

tifying and conducting strategic acquisitions. Furthermore, the

Parent Company is responsible for allocating capital, strategic

HR and IT work and the operation of all shared IT systems.

Strategies for the divisions:

• Strong brands and leading market positions

in selected niches

• High customer value in the products

• Diversified customer base

• International expansion

Stable ownership situation

The VBG Group’s principal owners comprise three foundations

that were established by the Group’s founder, Herman Kreft-

ing. This ownership structure has historically provided a high

degree of financial stability, which in turn has resulted in solid

total returns for shareholders.

VBG GROUP IN THE WORLD

The VBG Group has 31 wholly owned companies in 18 countries and more than 1,600 employees in 18 countries worldwide.

Own companiesImporters/Agents

VBG Truck EquipmentEdscha Trailer SystemsMobile Climate ControlRingfeder Power Transmission


3

SALES BY DIVISION SALES BY MARKET

This is the VBG Group, cont.

DIVISIONS BRANDS

Our divisions

VBG Truck Equipment, 25%

Edscha Trailer Systems, 7%

Mobile Climate Control, 54%

Ringfeder Power Transmission, 14%

Sweden, 8%

Other Nordic countries, 5%

Germany, 13%

Other European countries, 15%

North America, 51%

Brazil, 2%

Australia/New Zealand, 2%

China, 1%

Rest of world, 3%

VBG TRUCK EQUIPMENT

By virtue of its own strong brands, the division is an interna-tionally leading supplier of coupling equipment for trucks with heavy trailers. The division accounts for more than 50% of the global market via the Ringfeder and VBG brands. The division also has Onspot — automatic tire chains with a world-leading position in its niche.

EDSCHA TRAILER SYSTEMS

By virtue of its own strong brands, the division is an internatio-nally leading supplier of sliding roofs to tarpaulin-covered trai-lers and tipper vehicles, as well as sliding bow roofs for railway wagons. The division accounts for approximately 40% of the global market for sliding roofs via the Edscha Trailer Systems and Sesam brands.

RINGFEDER POWER TRANSMISSION

By virtue of its own strong brands, the division is a recognized global market leader in selected niches within mechanical power transmission and energy and shock absorption. The division’s brands are Ringfeder, Tschan, Henfel and Gerwah. The customers are found in such widely disparate industrial markets as construc-tion, machinery, power and mining.

MOBILE CLIMATE CONTROL

By virtue of its own strong brand, the division is an industry-leading supplier of complete climate control systems (HVAC systems) to commercial motor vehicles, primarily in North America and Europe. The customers are mainly found in four market segments: buses, off-road vehicles, utility vehicles and defense vehicles.


4

VBG Group’s core markets remained strong in the third quar-

ter, and Group sales increased by 4% over the preceding year,

to just over SEK 900 million. At the same time, the Group

reported continued stability in the operating margin for the

quarter, at 12%.

The strength of VBG Group lies in its portfolio strategy and

its diversified business structure: we work in carefully selected

niches, which creates an equalising and dampening effect

against economic fluctuations in our markets. This means we

can deliver at healthy, stable levels over time as regards both

sales and earnings.

Continued growth for deliveries to commercial

vehicles during the quarter

Sales to the commercial vehicle market – which covers VBG

Truck Equipment, Mobile Climate Control and Edscha Trailer

Systems – in the third quarter totaled just under SEK 800 mil-

lion, corresponding to 86% of the Group’s total sales. Com-

pared with the preceding year, sales for commercial vehicles

increased just over 5% in the quarter; we noted a downturn in

Europe that was, however, compensated for with upturns in

the North American market and the rest of the world. Looking

at the climate control system market, Mobile Climate Control

reported favourable levels of sales and stable profitability in

the quarter and also reported continued growth, if not as

robust as we have seen previously. The important US market

remained strong, and there are no definite indications of any

major changes to the economy.

The trade war currently under way between the US and

China impacts the operations of Mobile Climate Control to

some extent, since certain products are manufactured in China

and then sold in the US. Mobile Climate Control has good

possibilities for managing this, which means it does not repre-

sent any major problems for the division, nor will it lead to any

crucial changes for VBG Group.In the third quarter, VBG Truck

Equipment once again showed signs of strength in its opera-

tions and business model. The division achieved both growth

and excellent profitability in the quarter. In the European mar-

ket, which is VBG Truck Equipment’s core market, we are see-

ing the rate of growth slow down somewhat but the situation

remains stable with healthy order books through the end of

the year.

VBG GROUP DELIVERS A STRONG THIRD QUARTER

The volatility and slowdown we saw in the trailer

industry in the second quarter continued into the third

quarter as well. It had a noticeable impact on our small-

est division, Edscha Trailer Systems, but had little impact

on the Group as a whole since the division’s sales consti-

tute less than 5% of the Group’s total sales. A decrease

in the underlying need for transportation as a result of a

weaker economy in combination with too much stock of

new and used trailers meant that trailer manufacturers

reduced their production drastically in the third quarter.


5

Ringfeder Power Transmission – continued stable

profitability

Ringfeder Power Transmission, which has a strong position

globally in its market niches, represented 14% of the Group’s

sales. The division is experiencing a trend of steadily decreas-

ing demand for capital goods, primarily in the US and Ger-

many, where order bookings for the machine industry contin-

ued to decline. This trend was partially compensated for by

upturns in Australia and Brazil. Despite a generally weaker

market, Ringfeder Power Transmission reported continued

stability in its profitability.

VBG Group – well placed for structural growth

at the right time

Since the former Division Manager of Mobile Climate Control

left the Group on September 1 for a job in the Investor sphere

of companies, I have now taken on the job of Division Man-

ager for Mobile Climate Control in addition to my role as Pres-

ident and CEO. The division has a well-functioning manage-

ment team and its business situation is stable. This permits me

to regard the immediate future with confidence, and I look

forward to working on strengthening the division further.

On the whole, the Group reported a stable performance

and excellent results this quarter. In pace with a more uncer-

tain economy, it is a source of comfort that today we have a

lower business and market risk in the Group as a result of the

structure and breadth we have as regards the market, our

products and our customers. With our renewed bank agree-

ment, we also have flexibility in our ability to manage both our

capital structure and financial risks while at the same time

being prepared to carry out acquisitions at the right time,

under the right conditions.

Anders Birgersson

President and CEO, VBG Group


6

GROUP TREND

Group, SEK M9 months

2019Q3

2019Q2

2019Q1

2019Full-year

2018Q4

20189 months

2018Q3

2018Q2

2018Q1

2018Full-year

2017Q4

2017

Net sales 2,878.1 909.1 979.4 989.6 3,492.4 868.8 2,623.7 874.8 931.2 817.7 3,002.0 737.0

Operating profit before depreci-ation/amortization (EBITDA) 451.7 137.4 151.2 163.0 497.4 108.3 389.1 127.4 137.3 124.4 428.3 88.1

Operating profit before amortization (EBITA) 392.2 117.3 131.3 143.6 449.3 95.8 353.5 115.2 125.3 113.0 382.8 76.1

Operating profit (EBIT) 368.2 109.4 123.3 135.5 417.6 87.9 329.7 107.3 117.3 105.2 351.1 68.2

Operating margin (EBIT), % 12.8 12.0 12.6 13.7 12.0 10.1 12.6 12.3 12.6 12.9 11.7 9.2

Operating profit after financial items (EBT) 335.2 103.9 109.6 121.7 373.1 81.1 292.0 100.9 105.6 85.6 315.6 52.6

Profit after tax 245.9 73.7 83.2 89.0 273.0 60.5 212.5 71.2 77.8 63.5 220.5 30.6

Earnings per share, SEK 9.83 2.95 3.32 3.56 10.92 2.42 8.50 2.85 3.11 2.54 9.62 1.34

Cash flow from operating activities 317.0 145.0 72.0 100.0 253.6 46.6 207.0 97.0 37.0 73.0 243.7 87.5

ROE (cumulative), % 14.0 14.0 14.8 15.6 12.8 12.8 13.4 13.4 13.4 12.3 12.3 12.3

ROCE (cumulative), % 14.1 14.1 14.8 15.7 13.2 13.2 14.0 14.0 14.1 13.5 10.7 10.7

Equity/assets ratio, % 55.8 55.8 55.2 54.2 56.7 56.7 54.9 54.9 53.9 54.1 54.7 54.7

EBITDA, effect of IFRS 16 24.8 8.5 8.2 8.1

EBITA, effect of IFRS 16 1.9 0.8 0.7 0.4

EBIT, effect of IFRS 16 1.9 0.7 0.7 0.4

Profit after tax, effect of IFRS 16 –2.5 –1.2 –0.1 –1.2

Sales, SEK M9 months

2019 Q3 2019 Q2 2019 Q1 2019Full-year

2018 Q4 20189 months

2018 Q3 2018 Q2 2018 Q1 2018Full-year

2017 Q4 2017

Sweden 217.9 60.2 75.5 82.2 275.9 69.2 206.8 58.1 73.3 75.3 241.1 58.0

Other Nordic countries 151.7 44.9 51.8 55.0 194.7 47.6 147.0 48.4 50.1 48.5 169.8 41.6

Germany 369.7 112.0 126.3 131.4 514.7 121.2 393.5 121.4 135.9 136.1 466.8 111.4

Other European countries 442.7 127.2 151.0 164.6 576.2 133.6 442.6 134.1 158.4 150.1 521.7 125.4

North America 1,467.5 486.3 501.9 479.3 1,648.6 414.2 1,234.5 441.8 449.0 343.7 1,348.8 326.5

Brazil 59.3 21.0 17.9 20.4 62.9 17.1 45.8 16.6 13.6 15.7 69.2 16.5

Australia/New Zealand 68.1 26.0 20.4 21.7 73.6 19.0 54.5 16.1 13.3 25.2 80.0 24.9

China 25.7 8.1 8.2 9.4 45.6 14.9 30.7 12.4 12.3 6.0 26.8 7.4

Rest of world 75.5 23.3 26.5 25.6 100.1 31.9 68.2 25.8 25.4 17.0 77.7 25.5

2,878.1 909.1 979.4 989.6 3,492.4 868.8 2,623.7 874.8 931.2 817.7 3,002.0 737.0

NET SALES, SEK M PROFIT AFTER FINANCIAL ITEMS, SEK M

0

150

75

225

300

375

450

0

60

40

20

100

80

120

20192016 2017 2018

Quarterly figures Rolling 4 quarters

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q3Q2Q1 Q2 Q3 Q40

800

1,600

2,400

4,000

3,200


0

400

200

600

800

1,000

2019Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q3Q2Q1 Q2 Q3 Q4

2016 2017 2018


7

Sales and earnings

Third quarter of 2019

Sales of SEK 909.1 M (874.8) were 3.9% higher compared

with the third quarter of 2018. Adjusted for currency effects,

the actual organic growth was negative 0.5%.

Consolidated operating profit increased to SEK 109.4 M

(107.3), with an operating margin of 12.0% (12.3). Group-

wide overheads in the Parent Company that have not been

allocated to the divisions totaled SEK 3.1 M (2.2).

Net interest expense was SEK 6.0 M (expense: 8.6) and the

quarter’s currency effect on foreign-currency denominated

credits was a positive SEK 0.5 M (pos: 2.2). Taken together,

this resulted in a net financial expense of SEK 5.5 M (expense:

6.4). Accordingly, profit after financial items amounted to SEK

103.9 M (100.9). Profit after tax totaled SEK 73.7 M (71.2)

and earnings per share amounted to SEK 2.95 (2.85).

Nine months 2019

Sales of SEK 2,878.1 M (2,623.7) were 9.7% higher than in

the first nine months of 2018. Adjusted for currency effects

between the years, actual organic volume growth was 4.6%.

Operating profit amounted to SEK 368.2 M (329.7), with an

operating margin of 12.8% (12.6). Group-wide overheads in

the Parent Company that have not been allocated to the divi-

sions totaled SEK 12.7 M (11.6).

The Group’s net interest expense for the first nine months of

the year was SEK 27.4 M (expense: 25.9) and the currency

effect on foreign-currency denominated credits was a negative

SEK 5.7 M (neg: 11.8). Taken together, this resulted in a net

financial expense of SEK 33.1 M (expense: 37.7). Accordingly,

profit after financial items was SEK 335.2 M (292.0), profit

after tax totaled SEK 245.9 M (212.5) and earnings per share

amounted to SEK 9.83 (8.50).

Capital expenditures

The Group’s new capital expenditures for the third quarter

amounted to SEK 18.5 M (20.5). In total for the first nine

months of the year, new capital expenditures were SEK 50.3

M (49.8), of which SEK 7.5 M pertained to purchases in accor-

dance with IFRS 16.

Financial position

Profit after tax for the first nine months of the year amounted

to SEK 245.9 SEK M (212.5). Other comprehensive income for

the nine-month period amounted to SEK 60.4 M (35.2), which

yielded total comprehensive income of SEK 306.3 M (247.6).

After the payment of dividends totaling SEK 112.5 M (81.3)

to the shareholders, equity at September 30 amounted to SEK

2,420.2 M (2,226.5 at year-end).

The equity/assets ratio declined slightly during the period to

55.8% (56.7 at year-end); 2.1 percentage points of this

decrease was a result of IFRS 16. Cash and cash equivalents

increased by SEK 103.2 M during the period to SEK 474.6 M at

the end of the period (371.4 at year-end). In addition, there

were unutilized overdraft facilities of SEK 100.0 M, which

means the Group at the end of September had available liquid-

ity of SEK 574.6 M (471.4 at year-end).

The Group’s interest-bearing net debt (including pension lia-

bility) increased by SEK 63.3 M, of which SEK 33.9 M pertains

to indexation of the pension liability owing to a reduced dis-

count rate, as well as additional lease liability and increased

bank balances. Interest-bearing net debt after nine months

thus totaled SEK 711.2 M (647.9 at year-end).

The ratio of interest-bearing net debt to equity was 0.29 at

September 30, 2019 (0.29 at December 31, 2018) and the

ratio of net debt to consolidated operating profit before depre-

ciation/amortization and impairment (EBITDA on a rolling

four-quarter basis) was 1.27 (1.30 at year-end).

The Group’s goodwill increased by SEK 17.9 M due to

exchange rate changes and at the end of September amounted

to SEK 1,146.5 M (1,128.6 at year-end), which in relation to

equity amounted to a ratio of 0.47 (0.51 at year-end).

Cash flow

Cash flow from operating activities during the first nine

months of the year amounted to SEK 317.0 M (207.0). Paid

new capital expenditures during the period amounted to SEK

52.8 M (39.5). Dividends totaling SEK 112.5 M (81.3) were

paid to the shareholders and the Group’s total non-current

and current financial liabilities declined SEK 59.2 M (47.5)

during the first nine months of the year, which resulted in a

negative cash flow from financing activities of SEK 171.7 M

(neg: 128.8). Net cash flow for the period was thus SEK 94.4

M (38.8).

Personnel

At September 30, 2019, there were 1,644 employees in the

VBG Group (1,573 at year-end), of which 212 (215) in Swe-

den. During the first nine months of the year, the Group

employed an average of 1,636 persons (1,554 during the

year-earlier period), of which 218 (214) were active in Sweden.

The cost of salaries and social security contributions was SEK

670.4 M (591.2).


8

IFRS 16

The effect of IFRS 16 for the first nine months of the year con-

sisted of an increase in the balance sheet of SEK 157.2 M, a

positive impact on EBIT of SEK 1.9 M and an adverse impact

on profit after tax of SEK 2.5 M. As a consequence, a number

of key figures were also impacted. The largest share of the

change in the balance sheet, SEK 157.2 M, is attributable to

properties: SEK 143.4 M, of which SEK 107.4 M relates to

Mobile Climate Control. The effect on EBITDA in the first nine

months of the year was a positive SEK 24.8 M, as lease costs

from an IFRS 16 perspective become amortization of the right-

of-use relating to the lease assets. Total amortization regard-

ing IFRS 16 assets was SEK 22.9 M in the first nine months of

the year. Overall, IFRS 16 has a minor impact on the Group as

a whole. See page 24 for more comparisons of the impact of

IFRS 16.

Per share data

Earnings per share for the first nine months of the year

amounted to SEK 9.83 (8.50) on 25,004,048 shares.

Equity per share (total shares outstanding at the end of the

period) was SEK 96.79 at September 30, 2019, compared with

SEK 86.83 at the same time last year and SEK 89.04 at year-

end.

At the end of the quarter, the share price was SEK 144.50,

which corresponds to a market capitalization of SEK 3,613 M,

compared with a share price of SEK 126.8 and market capital-

ization of SEK 3,170 M at year-end.

The number of shareholders decreased by 254 in the third

quarter, and at September 30 was 4,396 (4,308 at year-end).


9

VBG TRUCK EQUIPMENT

SALES/EARNINGS

SEK M9 months

2019Q3

2019Q2

2019Q1

2019

Full-year

2018Q4

20189 months

2018Q3

2018Q2

2018Q1

2018Full-year

2017Q4

2017

Net sales 734.7 220.8 247.4 266.5 921.0 244.7 676.3 205.1 231.8 239.4 836.7 223.1

EBITDA 181.0 52.9 59.5 68.7 191.4 51.0 140.4 36.9 42.0 61.5 184.6 50.4

EBITA 164.1 47.1 53.9 63.1 175.5 47.0 128.5 32.9 38.0 57.5 170.8 46.7

EBITA margin, % 22.3 21.3 21.8 23.7 19.0 19.2 19.0 16.0 16.4 24.0 20.4 21.3






SALES BY MARKET

SEK M9 months

2019Q3

2019Q2

2019Q1

2019

Full-year

2018Q4

20189 months

2018Q3

2018Q2

2018Q1

2018Full-year

2017Q4

2017

Sweden 184.7 50.7 63.2 70.8 234.6 58.7 175.9 48.9 62.1 64.9 199.0 48.7


Germany 105.0 34.2 35.0 35.8 127.5 29.4 98.1 25.9 35.4 36.8 118.8 29.8


North America 75.7 26.9 23.5 25.3 99.4 35.9 63.5 24.0 19.2 20.3 92.0 28.6


China 3.3 0.0 0.0 3.3 14.4 8.0 6.5 3.1 2.8 0.6 1.6 1.6

Rest of world 18.6 4.6 9.0 5.0 19.1 7.1 12.1 2.0 7.6 2.5 25.2 12.0

VBG Truck Equipment 734.7 220.8 247.4 266.5 921.0 244.7 676.3 205.1 231.8 239.4 836.7 223.1

THIRD QUARTER OF 2019

• Sales rose to SEK 220.8 M (205.1).• EBITA increased to SEK 47.1 M (32.9), with an EBITA margin of 21.3% (16.0).

NINE MONTHS 2019



10

Sales and earnings


VBG Truck Equipment reported another strong quarter, in

terms of sales and operating profit (EBITA). Sales for the quar-

ter grew 7.6% year-on-year to SEK 220.8 M (205.1). Adjusted

for exchange rate changes year-on-year, where the average

USD rate between the quarters strengthened 7.2% and the

EUR, which is a more important currency for the division,

strengthened 2.5%, the actual organic growth was 5.5%.

EBITA, operating profit excluding amortization of intangible

assets, for VBG Truck Equipment rose year-on-year to SEK 47.1

M (32.9) with an EBITA margin of 21.3% (16.0).

Nine months 2019

Sales in VBG Truck Equipment for the first nine months of the

year increased 8.6% year-on-year to SEK 734.7 M (676.3).

The highest sales growth was noted in Europe and North

America. Adjusted for exchange rate changes, where the

average USD rate between the periods strengthened by 9.7%

while the EUR strengthened 3.2%, the actual organic growth

was 5.9%.

For the first nine months of the year, VBG Truck Equip-

ment’s EBITA increased to SEK 164.1 M (128.5), with an EBITA

margin of 22.3% (19.0).

During the first half of the year, the division’s working capi-

tal also increased SEK 13.2 M to SEK 227.0 M; plus property,

plant and equipment, operating capital amounted to SEK

339.3 M at the end of September (300.7 at year-end) of which

SEK 19.6 M pertains to IFRS 16.

The division’s return on operating capital (ROOC), where

EBITDA on a rolling four-quarter basis is put in relation to

average operating capital for the same period, was 65.0%

(64.5% annual value in 2018).

Investments and depreciation/amortization

VBG Truck Equipment’s investments during the third quarter

amounted to SEK 7.0 M (5.8), of which SEK 2.3 M pertains to

purchases in accordance with IFRS 16. In total for the first nine

months of the year, new capital expenditures were SEK 15.9 M

(10.0), of which SEK 2.6 M pertained to purchases in accor-

dance with IFRS 16. Depreciation/amortization during the

third quarter totaled SEK 5.8 M (4.0), of which SEK 1.9 M per-

tains to depreciation/amortization in accordance with IFRS 16;

the total for the first nine months of the year was SEK 17.1 M

(12.1), of which SEK 5.3 M pertains to depreciation/amortiza-

tion in accordance with IFRS 16.

Personnel

During the first nine months of the year, VBG Truck Equipment

employed an average of 282 persons (270 during the year-ear-

lier period). At September 30, 2019, there were 280 employ-

ees in the division (276 on September 30, 2018), compared

with 278 employees at year-end. Personnel costs for the first

nine months of the year amounted to SEK 159.8 M (151.5),

resulting in a cost per employee of SEK 566.7 thousand

(548.9).

0

400

200

600

800

1,000

0

60

120

180

240

300

20192016 2017 2018


Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q3Q2Q1 Q2 Q3 Q4 0

50

100

200

150

0

40

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80

60

20192016 2017 2018


Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q3Q2Q1 Q2 Q3 Q4

NET SALES, SEK M EBITA, SEK M


11


SALES/EARNINGS

SEK M9 months

2019Q3

2019Q2

2019Q1

2019

Full-year

2018Q4

20189 months

2018Q3

2018Q2

2018Q1

2018

Full-year

2017Q4

2017

Net sales 192.3 47.3 69.0 76.0 322.1 71.5 250.5 73.3 88.6 88.7 259.7 63.4

EBITDA 21.6 2.0 6.4 13.2 48.9 9.9 39.0 8.8 15.9 14.2 24.2 –0.1

EBITA 15.4 –0.1 4.3 11.2 43.5 8.5 34.9 7.4 14.6 13.0 18.8 –1.5

EBITA margin, % 8.0 –0.2 6.2 14.7 13.5 11.9 13.9 10.1 16.4 14.6 7.2 –2.4

Operating profit (EBIT) 11.4 –1.4 3.0 9.9 38.4 7.3 31.1 6.1 13.3 11.7 13.6 –2.8

Operating margin (EBIT), % 6.0 –3.0 4.3 13.0 11.9 10.1 12.4 8.4 15.0 13.2 5.3 –4.5




SALES BY MARKET

SEK M9 months

2019Q3

2019Q2

2019Q1

2019

Full-year

2018Q4

20189 months

2018Q3

2018Q2

2018Q1

2018

Full-year

2017Q4

2017

Sweden 0.1 0.0 0.1 0.0 0.2 0.1 0.1 0.0 0.1 0.1 0.2 0.0


Germany 103.6 24.8 38.3 40.5 172.8 42.6 130.2 42.7 43.4 44.4 147.0 36.5


Rest of world 1.9 0.9 0.1 0.8 1.9 0.5 1.4 0.8 0.3 0.0 0.9 0.1

Edscha Trailer Systems 192.3 47.3 69.0 76.0 322.1 71.5 250.5 73.3 88.6 88.7 259.7 63.4


• Sales amounted to SEK 47.3 M (73.3).• EBITA was negative SEK 0.1 M (pos: 7.4), with an EBITA margin of negative 0.2% (pos: 10.1).

NINE MONTHS 2019

• Sales amounted to SEK 192.3 M (250.5).• EBITA was SEK 15.4 M (34.9), with an EBITA margin of 8.0% (13.9).


12

Sales and earnings


Edscha Trailer Systems reported a weaker quarter compared

with the very strong year-earlier period; sales decreased by

35.4% to SEK 47.3 M (73.3). Adjusted for exchange rate

effects, the actual organic growth was negative 37.3%.

EBITA for the quarter decreased to negative SEK 0.1 M

(pos: 7.4), with an EBITA margin of negative 0.2% (pos: 10.1).

Nine months 2019

Edscha Trailer Systems reported a weaker nine months com-

pared with the very strong year-earlier period, which was the

strongest since 2008. Sales for the division decreased by

23.2% to SEK 192.3 M (250.5). Adjusted for exchange rate

effects, the actual organic growth was negative 25.6%.

EBITA for the first nine months of the year totaled SEK 15.4

M (34.9), with an EBITA margin of 8.0% (13.9).

During the first nine months of the year, the division’s work-

ing capital decreased SEK 0.5 M to SEK 62.9 M; plus property,

plant and equipment, operating capital amounted to SEK








Edscha Trailer Systems’ investments during the third quarter

amounted to SEK 0.3 M (0.9), of which SEK 0.1 M pertains to

investments in accordance with IFRS 16. In total for the first

nine months of the year, new capital expenditures were SEK

3.4 M (1.9), of which SEK 0.3 M pertained to purchases in

accordance with IFRS 16. Depreciation/amortization during

the third quarter totaled SEK 3.4 M (2.7), of which SEK 0.5 M

pertains to depreciation/amortization in accordance with IFRS

16; the total for the first nine months of the year was SEK 10.2

M (7.8), of which SEK 1.8 M pertain to depreciation/amortiza-


Personnel

During the first nine months of the year, Edscha Trailer Sys-

tems employed an average of 91 persons (85 during the

year-earlier period).

At 30 September 2019, there were 86 employees in the divi-

sion (87 on September 30, 2018), compared with 84 employ-

ees at year-end. Personnel costs for the first nine months of

the year amounted to SEK 29.0 M (28.3), resulting in a cost

per employee of SEK 319.1 thousand (325.3).

0

80

160

240

400

320

0

20

40

60

100

80

20192016 2017 2018


Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q3Q2Q1 Q2 Q3 Q40

20

10

30

50

40

0

4

16

12

8

20

20192016 2017 2018


Q3 Q4 Q1 Q2 Q3Q4

Q1 Q3Q2Q1 Q2 Q3 Q4



13

SALES/EARNINGS

SEK M9 months

2019Q3

2019Q2

2019Q1

2019Full-year

2018Q4

20189 months

2018Q3

2018Q2

2018Q1

2018Full-year

2017Q4

2017

Net sales 1,557.7 511.1 532.5 514.1 1,727.3 421.8 1,305.5 460.4 476.8 368.3 1,426.7 338.6

EBITDA 192.9 64.6 66.8 61.4 187.3 33.9 153.3 57.0 64.7 31.7 160.8 28.6

EBITA 169.8 57.0 59.0 53.9 173.9 30.3 143.6 53.4 61.4 28.8 149.0 25.6

EBITA margin, % 10.9 11.1 11.1 10.5 10.1 7.2 11.0 11.6 12.9 7.8 10.4 7.6






SALES BY MARKET

SEK M9 months

2019Q3

2019Q2

2019Q1

2019Full-year

2018Q4

20189 months

2018Q3

2018Q2

2018Q1

2018Full-year

2017Q4

2017

Sweden 30.5 9.4 11.0 10.1 36.7 9.0 27.7 8.3 10.1 9.4 37.3 8.0


Germany 25.7 8.7 8.8 8.3 30.6 7.3 23.3 7.8 7.7 7.8 24.1 6.3


North America 1,309.9 431.5 450.4 428.0 1,429.9 348.2 1,081.7 386.0 398.7 297.0 1,155.7 273.6

China 11.2 3.2 4.5 3.6 14.4 3.1 11.3 4.4 4.9 2.0 9.3 2.1

Rest of world 24.2 10.3 6.2 7.7 25.8 8.7 17.1 6.6 6.0 4.5 18.8 3.6

Mobile Climate Control 1,557.7 511.1 532.5 514.1 1,727.3 421.8 1,305.5 460.4 476.8 368.3 1,426.7 338.6



• Sales rose to SEK 511.1 M (460.4).• EBITA was SEK 57.0 M (53.4), with an EBITA margin of 11.1% (11.6).

NINE MONTHS 2019

• Sales rose 19.3% and totaled SEK 1,557.7 M (1,305.5).• EBITA increased to SEK 169.8 M (143.6), with an EBITA margin of 10.9% (11.0).


14

Sales and earnings


Sales for the third quarter grew by 11.0% year-on-year to SEK

511.1 M (460.4), with a very robust performance primarily in

sales in the vital North American market. Adjusted for

exchange rate changes, where the average USD rate strength-

ened by 7.2% year-on-year in the third quarter, the actual

organic growth was 5.1%.

EBITA for Mobile Climate Control was SEK 57.0 M (53.4)

with an EBITA margin of 11.1% (11.6).

Nine months 2019

Mobile Climate Control reported strong growth in the first

nine months of the year and sales increased by 19.3% year-

on-year to SEK 1,557.7 M (1,305.5). Adjusted for exchange

rate changes, where the average USD rate strengthened by

9.7% compared to the year-earlier period, the actual organic

growth was 12.3%.

EBITA for Mobile Climate Control increased to SEK 169.8 M

(143.6) with an EBITA margin of 10.9% (11.0).


ing capital increased SEK 73.1 M to SEK 497.6 M; plus prop-

erty, plant and equipment, operating capital amounted to SEK








Mobile Climate Control’s investments during the third quarter

amounted to SEK 6.9 M (10.7). In total for the first nine




third quarter totaled SEK 13.0 M (9.0), of which SEK 4.1 M

pertains to depreciation/amortization in accordance with IFRS

16; the total for the first nine months of the year was SEK 39.2

M (25.9), of which SEK 12.3 M pertains to depreciation/amor-

tization in accordance with IFRS 16.

Personnel

During the first nine months of the year, Mobile Climate

Control employed an average of 925 persons (887 during the

year-earlier period).

At September 30, 2019, there were 931 employees in the

division (879 on September 30, 2018), compared with 870

employees at year-end. Personnel costs for the first nine

months of the year amounted to SEK 341.4 M (278.4), result-

ing in a cost per employee of SEK 369.1 thousand (316.7).

0

400

800

1,200

1,600

2,400

2,000

0

100

200

300

600

500

400


Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2017 2018 2019

0

120

80

40

160

240

200

0

20

10

30

40

60

50


Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2017 2018 2019



15


SALES/EARNINGS

SEK M9 months

2019Q3

2019Q2

2019Q1

2019

Full-year

2018Q4

20189 months

2019Q3

2018Q2

2018Q1

2018

Full-year

2017Q4

2017

Net sales 393.4 129.9 130.5 133.0 522.0 130.5 391.5 136.2 134.0 121.4 479.1 112.0

EBITDA 67.2 20.5 23.8 23.0 87.2 19.8 67.4 26.8 21.0 19.6 76.7 15.6

EBITA 55.2 16.4 19.8 19.1 74.2 16.5 57.7 23.6 17.7 16.5 64.3 12.5

EBITA margin, % 14.0 12.6 15.2 14.3 14.2 12.6 14.7 17.3 13.2 13.6 13.4 11.1




EBITA, effect of IFRS 16 –0.1 0.0 0.0 –0.1

EBIT, effect of IFRS 16 –0.1 0.0 0.0 –0.1

SALES BY MARKET

SEK M9 months

2019Q3

2019Q2

2019Q1

2019

Full-year

2018Q4

20189 months

2018Q3

2018Q2

2018Q1

2018

Full-year

2017Q4

2017

Sweden 2.5 0.1 1.1 1.3 4.5 1.4 3.1 0.9 1.2 1.0 4.6 1.3


Germany 135.4 44.4 44.2 46.8 183.8 41.9 140.8 47.2 48.1 46.0 170.3 37.7


North America 81.5 27.7 28.0 25.8 119.1 29.9 89.2 31.8 31.1 26.4 101.1 24.3

Brazil 50.2 18.6 15.6 16.0 57.1 14.4 42.8 14.8 12.7 15.2 66.7 16.0


China 11.2 4.9 3.7 2.5 16.8 3.9 12.9 4.9 4.6 3.4 15.9 3.7

Rest of world 41.0 10.4 13.8 16.9 60.2 18.7 42.5 16.2 14.1 11.9 42.8 11.6


• Sales amounted to SEK 129.9 M (136.2).• EBITA increased to SEK 16.4 M (23.6), with an EBITA margin of 12.6% (17.3).

NINE MONTHS 2019



16

Sales and earnings


Ringfeder Power Transmission sales decreased during the third

quarter by 4.7% year-on-year to SEK 129.9 M (136.2);

adjusted for exchange rate changes, where the average USD

rate strengthened by 7.2%, the Brazilian currency strength-

ened by 6.7% and the EUR strengthened by 2.5% compared

with the year-earlier period, the overall effect was actual

organic growth of negative 8.6%.

EBITA for Ringfeder Power Transmission increased year-on-

year to SEK 16.4 M (23.6) with an EBITA margin of 12.6%

(17.3).

Nine months 2019

Sales for the first nine months of the year increased 0.5%

year-on-year to SEK 393.4 M (391.5); adjusted for exchange

rate changes, where the average USD rate strengthened by

7.2%, the Brazilian currency strengthened by 1.3%, and the

EUR strengthened by 3.2% compared with the year-earlier

period, the actual organic growth was negative 3.7%.

EBITA for Ringfeder Power Transmission decreased year-on-

year to SEK 55.2 M (57.7) with an EBITA margin of 14.0%

(14.7).


ing capital increased SEK 8.4 M to SEK 223.6 M; plus prop-

erty, plant and equipment, operating capital amounted to SEK

348.3 M at the end of September (322.8 at year-end) of

which SEK 8.4 M pertains to IFRS 16.






Ringfeder Power Transmission’s investments during the third

quarter amounted to SEK 4.0 M (2.8). In total for the first nine




third quarter totaled SEK 5.2 M (4.3), of which SEK 0.9 M per-

tains to depreciation/amortization in accordance with IFRS 16;

the total for the first nine months of the year was SEK 15.4 M

(12.9), of which SEK 2.7 M pertains to depreciation/amortiza-


Personnel

During the first nine months of the year, Ringfeder Power

Transmission employed an average of 330 persons (303 during

the year-earlier period). At September 30, 2019, there were

338 employees in the division (335 on September 30, 2018),

compared with 335 employees at year-end. Personnel costs

for the first nine months of the year amounted to SEK 119.1 M

(113.2), resulting in a cost per employee of SEK 360.9 thou-

sand (337.9).

0

120

240

360

600

480

0

30

60

90

150

120

20192016 2017 2018


Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q3Q2Q1 Q2 Q3 Q40

20

40

60

80

100

0

5

15

10

25

20

20192016 2017 2018


Q3Q4

Q1 Q2 Q3 Q4 Q1 Q3Q2Q1 Q2 Q3 Q4



17

Parent Company

VBG Group AB’s operations are focused on managing, devel-

oping and coordinating the Group. The assets in the Parent

Company consist primarily of shares in subsidiaries and

brands. The objective is that the Group’s intellectual property

in the form of brands and other rights should be gathered in

the Parent Company. VBG Group AB focuses on maintaining

and developing all the Group’s trademarks and rights.

The Parent Company’s net sales pertain primarily to intra-

Group services, license revenues and rentals and amounted to

SEK 22.5 M (30.2) during the first nine months of the year.

The operating loss for the year was SEK 12.3 M (loss: 13.4).

Profit after dividends from Group companies and net financial

items totaled SEK 130.7 M (143.3).

Accounting policies

The VBG Group applies the EU-endorsed IFRS standards and

interpretations thereof (IFRIC). This interim report for the

Group has been prepared in accordance with the Annual

Accounts Act and IAS 34 Interim Financial Reporting, and for

the Parent Company, in accordance with the Annual Accounts

Act and recommendation RFR 2, Accounting for Legal Entities.

The same accounting policies and calculation methods were

applied as in the most recent annual report, with the excep-

tion of IFRS 16, which the Group applies from January 1,

2019.

IFRS 16 Leases took effect on January 1, 2019. IFRS 16

specifies the recognition of leases for both the lessor and les-

see. The implementation of the standard means almost all

leases will be recognized in the lessee’s balance sheet, as no

distinction is now made between operating and finance leases.

In accordance with the new standard, an asset (the right to

use a leased asset) and a financial liability pertaining to the

obligation to make lease payments are recognized in the bal-

ance sheet and that amortization of leased assets, separate

from the interest expense of the lease, is recognized in profit

or loss.

VBG Group has, when transitioning to IFRS 16 on January

1, 2019, used a modified retrospective approach, which means

the 2018 fiscal year is not restated. Lease liability is the total

present value of all future fees until the lease has expired. The

simplified rule was applied during the transition, meaning the

right-of-use (before adjustments for any advance payment)

corresponds to the lease liability. The discount rate is VBG

Group’s incremental borrowing rate for each currency. Exemp-

tions to not recognize short-term leases and assets of low

value were also applied.

This report may contain rounding differences.

New accounting policy for leases

As of January 1, 2019, VBG Group applies the recognition of

leases in accordance with IFRS 16 using the following account-

ing policy. All leases are recognized in the balance sheet, on

the starting date, as a right-of-use and a lease liability. An

agreement is considered, or includes a lease, if the agreement

transfers the right to determine the use of an identified asset

over a specified period in exchange for remuneration. A right-

of-use and lease liability are recognized for all leases with a

lease term of more than twelve months, with the exception of

assets of low value. After the starting date, right-of-use is

measured in accordance with provisions for property, plant

and equipment. A lease liability is discounted by using the

implicit interest in the lease, if this interest rate is readily iden-

tifiable. If the interest rate is not readily identifiable, the incre-

mental borrowing rate can be used. The incremental borrow-

ing rate is determined based on currency and financing terms

for the Group. The lease term is determined as the non-can-

cellable period together with both periods covered by a poten-

tial extension to the lease if the lessee is reasonably confident

that this alternative will be used, and periods covered by an

opportunity to end the lease if the lessee is reasonably confi-

dent that this alternative will be used. VBG Group has also

applied the simplified rule for fixed, non-lease components

and instead recognizes these together with the lease compo-

nent in the contract. Moreover, future modified leases will not

be recognized as a separate lease, but rather as a remeasure-

ment of the lease liability and an adjustment of right-of-use.

Risks and uncertainty factors

The Group’s and the Parent Company’s significant risks and

uncertainty factors include business-related operational risks

in the form of commodity risks, product risks, development

risks, intellectual property risks, environmental risks, political

risks, business interruption and property risks, cyclical risks, IT

security risks and legal risks. To these can be added financial

risks such as financing risks, liquidity risks, interest rate risks,

currency risks, credit and counterparty risks, and sustainability

risks.

For a more detailed description of the Group’s risks and risk

management, see Note 2 of VBG Group AB’s annual report for

2018.

Outlook for 2019

The company makes no forecast.

OTHER INFORMATION


18

Note

The information in this report is of the type that VBG Group

AB is obligated to disclose in accordance with the EU Market

Abuse regulation and/or the Swedish Securities Market Act.

The information was submitted for publication on 22 October

2019 at 8:00 a.m.

Press releases issued in the third quarter of 2019

Interim report January–June 2019 August 20, 2019

For further information, please contact:

Anders Birgersson, President and CEO

Telephone: +46 521–27 77 67, +46 702–27 77 78

E-mail: [email protected]

Vänersborg, October 22, 2019

VBG Group AB (publ)

Anders Birgersson

President

Financial information 2019/2020

Year-end report 2019 February 20, 2020

Interim report, three months 2020 April 28, 2020

Annual General Meeting 2020 April 28, 2020

Interim report, six months 2020 July 23, 2020

Interim report, nine months 2020 October 22, 2020

Related party transactions

There have been no related party transactions in 2019 that

have significantly affected the company’s financial position

and results. Related party transactions during 2018 are dis-

closed in Note 6 in the annual report for 2018.

Introduction

We have reviewed the interim report for VBG Group AB (publ),

Corp. ID no. 556069-0751, for the period 1 January –30 Sep-

tember 2019. The Board of Directors and the President are

responsible for the preparation and presentation of this interim

financial information in accordance with IAS 34 and the

Annual Accounts Act. Our responsibility is to express a conclu-

sion regarding this interim financial information based on our

review.

Aim and scope of review

We conducted our review in accordance with the International

Standard on Review Engagements ISRE 2410, “Review of

Interim Financial Information Performed by the Independent

Auditor of the Entity”. A review consists of making inquiries,

primarily of persons responsible for financial and accounting

matters, and applying analytical and other review procedures.

A review is substantially less in scope than an audit conducted

in accordance with International Standards on Auditing (ISA)

and other generally accepted auditing standards in Sweden.

The procedures performed in a review do not enable us to

obtain a level of assurance that would make us aware of all

significant matters that might be identified in an audit. There-

fore, the conclusion expressed based on a review does not

give the same level of assurance as a conclusion expressed

based on an audit.

Conclusion

Based on our review, nothing has come to our attention that

causes us to believe that the accompanying interim financial

information has not, in all material respects, been prepared in

accordance with IAS 34 and the Annual Accounts Act as

regards the Group and in accordance with the Annual

Accounts Act as regards the Parent Company.

Gothenburg, 22 October 2019

Öhrlings PricewaterhouseCoopers AB

Johan Malmqvist

Authorized Public Accountant

REVIEW REPORT


19

Consolidated Income Statement and Statement of other comprehensive income – Highlights

SEK M Q3 2019 Q3 2018 9 months 2019 9 months 2018 Full-year 2018

Net sales 909.1 874.8 2,878.1 2,623.7 3,492.4

Cost of goods sold –606.6 –579.2 –1,898.2 –1,717.8 –2,301.6

Gross profit 302.5 295.6 979.9 905.8 1,190.9

Selling expenses –95.0 –96.2 –290.4 –285.9 –381.7

Administrative expenses –66.6 –60.3 –204.3 –192.7 –265.0

Research and development costs –30.5 –33.8 –100.8 –99.3 –136.4

Other operating income and expenses –1.0 2.0 –16.2 1.7 9.8

–193.1 –188.3 –611.7 –576.1 –773.3

Operating profit 109.4 107.3 368.2 329.7 417.6

Exchange rate effects, net 0.5 2.2 –5.7 –11.8 –10.7

Interest income 0.9 0.4 2.3 1.2 2.2

Interest expenses –4.5 –6.9 –18.8 –20.8 –27.8

Other financial expenses, including IFRS 16 –2.4 –2.1 –11.0 –6.2 –8.3

Total financial items –5.5 –6.4 –33.1 –37.7 –44.5

Profit after financial items 103.9 100.9 335.2 292.0 373.1

Tax –30.1 –29.7 –89.3 –79.5 –100.1

Profit for the period 73.7 71.2 245.9 212.5 273.0

Profit for the period attributable to Parent Company shareholders 73.7 71.2 245.9 212.5 273.0

Other comprehensive income

Profit for the period 73.7 71.2 245.9 212.5 273.0

Items that will not be reversed in the Income Statement

Effect of translation of defined-benefit pension plans, net after tax –25.7 0.0 –25.7 0.0 –4.4

Items that may later be reversed in the Income Statement

Translation differences relating to foreign operations 26.8 –15.0 84.7 35.7 34.4

Translation differences pertaining to hedge accounting for net investments in foreign operations 0.1 0.6 1.4 –0.6 –2.0

Other comprehensive income, net after tax 1.2 –14.3 60.4 35.2 28.0

Comprehensive income for the period 74.9 56.8 306.3 247.6 301.0

Comprehensive income for the period attributable to Parent Company shareholders 74.9 56.8 306.3 247.6 301.0

Earnings per share, basic and diluted, SEK 2.95 2.85 9.83 8.50 10.92

Number of shares outstanding at end of period (‘000) 25,004 25,004 25,004 25,004 25,004

Average number of shares during the period (‘000) 25,004 25,004 25,004 25,004 25,004

Number of own shares at end of period (‘000) 1,192 1,192 1,192 1,192 1,192


20

Sales and earnings by segment

SEK M

VBG Truck

Equipment

Edscha Trailer

Systems

Mobile Climate Control

Ringfeder Power

Transmission Group-wide Group

2019

Q3 Jul–Sep Net sales 220.8 47.3 511.1 129.9 909.1

Operating profit/loss 47.1 –1.4 51.6 15.2 –3.1 109.4

Operating margin, % 21.3 –3.0 10.1 11.7 12.0

Net financial items –5.5 –5.5

Profit after financial items 103.9

2019

9 months Jan–Sep Net sales 734.7 192.3 1,557.7 393.4 2,878.1

Operating profit/loss 163.9 11.4 153.7 51.8 –12.7 368.2

Operating margin, % 22.3 6.0 9.9 13.2 12.8



2018

Q3 Jul–Sep Net sales 205.1 73.3 460.4 136.2 874.8

Operating profit/loss before items affecting comparability 32.9 6.1 48.0 22.5 –2.2 107.3




2018

9 months Jan–Sep Net sales 676.3 250.5 1,305.5 391.5 2,623.7

Operating profit/loss before items affecting comparability 128.3 31.1 127.4 54.5 –11.6 329.7





21

Consolidated Balance SheetSEK M 30 Sep 2019 30 Sep 2018 31 Dec 2018

Assets

Non-current assets

Intangible assets

Brands, customer relationships and other intangible assets 783.8 805.8 798.9Goodwill 1,146.5 1,125.6 1,128.6

1,930.3 1,931.5 1,927.5

Property, plant and equipment

Land and buildings 190.3 184.5 186.2Plant and machinery 114.0 102.8 100.7Equipment, tools, fixtures and fittings 51.0 53.2 51.3Construction in progress 19.9 8.7 10.3Right-of-use 159.1 — —

534.3 349.3 348.5

Deferred tax asset 73.9 54.0 63.8

Total non-current assets 2,538.5 2,334.8 2,339.9

Current assets

Inventories

Raw materials and consumables 380.4 327.6 322.2Work in progress 92.8 88.8 85.1Finished products and merchandise 238.0 212.0 227.6

711.2 628.4 634.9

Current receivables

Trade receivables 536.2 527.5 491.2Current tax assets 22.6 41.1 25.5Other receivables 30.2 41.5 41.4Prepaid expenses and accrued income 27.1 20.8 19.7

616.2 630.9 577.6

Cash and cash equivalents

Cash on hand and demand deposits 474.6 361.8 371.4Total current assets 1,801.9 1,621.1 1,583.9

Total assets 4,340.4 3,955.9 3,923.8

Equity and liabilities

Equity

Share capital 65.5 65.5 65.5Other contributed capital 779.4 779.4 779.4Reserves 96.9 22.8 118.4Retained earnings, incl. net profit for the year 1,478.3 1,303.5 1,263.1Total equity 2,420.2 2,171.2 2,226.5

Non-current liabilities

Provisions for pensions and similar obligations 236.5 192.3 196.9Deferred tax liability 229.8 214.3 224.6Other provisions 23.9 27.4 22.5Lease liability 138.2 — —Liabilities to credit institutions 789.0 783.9 3.0Total non-current liabilities 1,417.4 1,217.9 446.9

Current liabilities

Liabilities to credit institutions — 76.2 821.5Trade payables 239.0 256.5 212.7Current tax liabilities 28.9 42.2 36.7Other liabilities 31.4 31.8 28.2Lease liability 22.1 0.0 0.0Accrued expenses and deferred income 181.5 160.1 151.3Total current liabilities 502.8 566.8 1,250.4

Total equity and liabilities 4,340.4 3,955.9 3,923.8


22

Changes in Consolidated Equity

SEK M 9 months 2019 9 months 2018 Full-year 2018

Opening equity according to balance sheet at December 31 2,226.5 2,004.9 2,004.9

Total comprehensive income for the period 306.3 247.7 301.0

Warrants — — 1.9

Dividend –112.5 –81.3 –81.3

Equity at end of period 2,420.2 2,171.2 2,226.5

Consolidated Cash Flow Statement


Operating activities

Operating profit before financial items 368.2 329.7 417.6

Depreciation/amortization 60.6 59.4 79.8

Other items not affecting liquidity 10.3 22.8 24.8

Interest received etc. 3.3 1.6 3.0

Interest paid –26.0 –27.4 –36.8

Tax paid –94.4 –53.4 –80.7

Cash flow before change in working capital 321.9 332.6 407.7

Decrease/increase (–) in inventories –33.7 –124.5 –130.9

Decrease/increase (–) in trade receivables –4.0 –98.8 –61.7

Decrease/increase (–) in other current receivables 6.2 1.5 –0.3

Increase/decrease (–) in trade payables 1.5 74.8 29.9

Increase/decrease (–) in other current liabilities 25.1 21.4 8.9

Cash flow from operating activities 317.0 207.0 253.6

Investing activities

Investments in intangible assets –7.4 –1.8 –2.2

Investments in property, plant and equipment –45.5 –37.7 –45.0

Cash flow from investing activities –52.8 –39.5 –47.2

Financing activities

Repayment of loans –40.0 –40.0 –80.0

Loans raised and changes to existing loans –19.2 –7.5 0.6

Warrants — — 1.9

Dividend paid –112.5 –81.3 –81.3

Cash flow from financing activities –171.7 –128.8 –158.9

Cash flow for the year 92.5 38.8 47.5

Cash and cash equivalents at start of year 371.4 321.4 321.4

Translation difference, cash and cash equivalents 10.7 1.7 2.4

Cash and cash equivalents at year-end 474.6 361.9 371.4

Unutilized overdraft facilities 100.0 100.0 100.0

Total cash and cash equivalents available 574.6 461.9 471.4


23

Key figures for Group SEK M 9 months 2019 9 months 2018 Full-year 2018

Operating margin (EBIT), % 12.8 12.6 12.0

Profit margin (ROS), % 11.6 11.1 10.7

Return on equity (ROE), % 14.0 13.4 12.8

Return on capital employed (ROCE), % 14.1 14.0 13.2

Equity/assets ratio, % 55.8 54.9 56.7

Interest-bearing net debt/EBITDA 1.27 1.45 1.30

Equity per share outstanding at end of period, SEK 96.79 86.83 89.04

Cash flow from operating activities, per average share outstanding, SEK 12.68 8.28 10.14

Profit per average share outstanding during the period, SEK 9.83 8.50 10.92

Share price at end of period, SEK 144.50 152.00 127.00

Number of employees, average 1,636 1,554 1,561

Number of shares outstanding at end of period (‘000) 25,004 25,004 25,004

Number of own shares at end of period (‘000) 1,192 1,192 1,192

Average number of shares outstanding during the period (‘000) 25,004 25,004 25,004

Equity/assets ratio before IFRS 16, % 58.4 — —


24

Parent Company Balance Sheet

SEK M 30 Sep 2019 30 Sep 2018 Full-year 2018

Other intangible assets 0.5 1.4 0.8

Property, plant and equipment 2.3 1.4 1.2

Long-term investments 2,317.9 1,987.6 2,341.3

Total non-current assets 2,320.7 1,990.4 2,343.3

Receivables 124.9 469.1 113.8

Cash on hand, demand deposits and short-term investments 275.9 231.1 232.4

Total current assets 400.8 700.2 346.2

Total assets 2,721.5 2,690.6 2,689.5

Equity 1,443.7 1,337.0 1,425.6

Untaxed reserves 5.5 4.8 5.5

Provisions 13.0 16.0 13.1

Non-current liabilities 787.1 781.0 0.0

Current liabilities 472.2 551.8 1,245.3

Total equity and liabilities 2,721.5 2,690.6 2,689.5

Parent Company Income Statement


Net sales 22.5 30.2 42.6

Operating expenses –34.8 –43.6 –53.7

Operating loss –12.3 –13.4 –11.1

Net financial items 143.0 156.7 205.0

Profit after financial items 130.7 143.3 193.9

Appropriations — — 30.2

Tax — — –2.0

Profit for the period 130.7 143.3 222.1


25

The interim report at September 30 was prepared in accordance with the new IFRS 16 standard, which means assets and liabili-

ties in the balance sheet have increased with right-of-use assets and lease liabilities. Changes have also taken place in the income

statement as lease costs are reclassified to amortisation and interest expense in accordance with the new standard. The following

is a list of the effects on the balance sheet and income statement as well as on key figures resulting from the transition to the new

standard. See page 16 for more information about IFRS 16.

CONSOLIDATED INCOME STATEMENT — HIGHLIGHTS

SEK M

9 month 2019

excl. IFRS 16

9 month 2019

IFRS 16 effect

9 month 2019

incl. IFRS 16Q3 2019

excl. IFRS 16Q3 2019

IFRS 16 effectQ3 2019




incl. IFRS 16

Net sales 2,878.1 2,878.1 909.1 909.1 979.4 979.4

Operating expenses –2,451.2 24.8 –2,426.5 –780.2 8.5 –771.7 –836.4 8.2 –828.2

Depreciation/amortization –60.6 –22.9 –83.5 –20.3 –7.7 –28.0 –20.4 –7.5 –27.9

Operating profit 366.3 1.9 368.2 108.6 0.7 109.4 122.6 0.7 123.3

Net financial items –28.4 –4.6 –33.0 –4.0 –1.5 –5.5 –12.2 –1.5 –13.7

Profit/loss after financial items 337.9 –2.7 335.2 104.7 –0.8 103.9 110.4 –0.8 109.6

Tax –89.5 0.2 –89.3 –27.8 –0.4 –30.1 –27.2 0.8 –26.4

Profit/loss for the period 248.3 -2.5 245.9 74.9 -1.2 73.7 83.2 0.0 83.2

CONSOLIDATED BALANCE SHEET — HIGHLIGHTS

SEK M

9 month 2019

excl. IFRS 16

9 month 2019

IFRS 16 effect

9 month 2019

incl. IFRS 16

Q3 2019 excl. IFRS

16Q3 2019


incl. IFRS 16

6 month 2019

excl. IFRS 16

6 month 2019

IFRS 16 effect

6 month 2019

incl. IFRS 16

Assets

Total non-current assets 2,379.4 159.1 2,538.5 2,368.8 159.6 2,528.4 2,357.1 167.1 2,524.2

Total current assets 1,803.9 –2.0 1,801.9 1,724.0 –1.8 1,722.1 1,811.0 –1.8 1,809.2

Total assets 4,183.2 157.2 4,340.4 4,092.8 157.8 4,250.6 4,168.1 165.3 4,333.4

Liabilities

Equity 2,423.1 –2.9 2,420.2 2,347.0 –1.7 2,345.3 2,352.0 –1.6 2,350.3

Total non-current liabilities 1,279.4 138.0 1,417.4 1,251.1 134.9 1,386.0 449.3 142.6 591.8

Total current liabilities 480.8 22.1 502.8 494.7 24.6 519.3 1,366.9 24.3 1,391.2

Total equity and liabilities 4,183.2 157.2 4,340.4 4,092.8 157.8 4,250.6 4,168.1 165.3 4,333.4

THE GROUP’S KEY FIGURES

SEK M

9 month 2019

excl. IFRS 16

9 month 2019

IFRS 16 effect

9 month 2019







incl. IFRS 16

EBITDA 426.9 24.8 451.7 128.9 8.5 137.4 143.1 8.2 151.2

EBITA 390.3 1.9 392.2 116.5 0.8 117.3 130.6 0.7 131.3

Equity/assets ratio, % 57.9 –2.1 55.8 56.2 0.0 56.2 55.2 0.0 55.2

Interest-bearing net debt 550.9 160.3 711.2 — — — — — —

Interest-bearing net debt/EBITDA 1.03 0.24 1.27 — — — — — —

ROCE 14.1 0.7 14.8 — — — — — —

Earnings/loss per share, SEK 9.93 –0.10 9.83 2.85 –0.05 2.81 3.33 0.0 3.33

Effects of transition to IFRS 16


26

Alternative Performance MeasuresReconciliation between IFRS and performance measures used

Certain information in this report that is used by company management and analysts to assess the Group’s performance has not

been prepared in accordance with IFRS. Company management believes that this information makes it easier for investors to ana-

lyze the Group’s earnings performance and financial structure. Investors should view this information as a supplement rather than

a replacement of financial reporting in accordance with IFRS.

ACTUAL ORGANIC GROWTH

Growth in net sales excluding effects of structural changes, meaning acquired or divested operations, and excluding currency

effects.

SEK M 9 months 2019 Q3 2019 9 months 2018 Q3 2018 Full-year 2018

Group

Net sales 2,878.1 909.1 2,623.7 874.8 3,492.4

Acquired volume (incl. full-year effect from preced-ing year)

Currency effect –133.0 –38.4 –7.0 –14.3 –100.5

Net sales excluding acquisitions and currencies 2,745.1 870.7 2,616.7 860.5 3,392.0

Actual organic growth 121.5 –4.1 351.7 141.3 390.0

Organic growth, % 4.6 –0.5 15.5 19.6 13.0

VBG Truck Equipment

Net sales 734.7 220.8 676.3 205.1 921.0


Currency effect –18.8 –4.4 –22.1 –8.1 –30.6

Net sales excluding acquisitions and currencies 715.9 216.4 654.2 197.0 890.4

Actual organic growth 39.6 11.3 40.6 11.6 53.7

Organic growth, % 5.9 5.5 6.6 6.2 6.4

Edscha Trailer Systems

Net sales 192.3 47.3 250.5 73.3 322.1


Currency effect –6.0 –1.4 –16.1 –5.3 –19.6


Actual organic growth –64.2 –27.3 38.1 10.4 42.8

Organic growth, % –25.6 –37.3 19.4 18.2 16.5


Net sales 1,557.7 511.1 1,305.5 460.4 1,727.3


Currency effect –91.9 –27.3 14.0 –1.7 –36.3

Net sales excluding acquisitions and currencies 1,465.8 483.8 1,319.5 458.7 1,691.0

Actual organic growth 160.3 23.4 231.5 101.3 264.3

Organic growth, % 12.3 5.1 21.3 28.3 18.5

Ringfeder Power Transmission

Net sales 393.4 129.9 391.5 136.2 522.0


Currency effect –16.3 –5.3 –8.8 –3.2 –13.9


Actual organic growth –14.4 –11.7 15.7 14.2 29.1

Organic growth, % –3.7 –8.6 4.3 12.0 6.1


27

EBITDA

Operating profit before depreciation and impairment on property, plant and equipment.

Group, SEK M 9 months 2019 Q3 2019 9 months 2018 Q3 2018 Full-year 2018

Operating profit 368.2 109.4 329.7 107.3 417.6

Depreciation/amortization 83.5 28.0 59.4 20.1 79.8

EBITDA 451.7 137.4 389.1 127.4 497.4

EBITA

Operating profit before amortization and impairment of intangible assets.


Operating profit/loss 368.2 109.4 329.7 107.3 417.6

Amortization of intangible assets 24.0 7.9 23.8 7.9 31.7

EBITA 392.2 117.3 353.5 115.2 449.3

PROFIT MARGIN

Profit after financial items as a percentage of net sales.


Net sales 2,878.1 909.1 2,623.7 874.8 3,492.4

Profit after financial items 335.2 103.9 292.0 100.9 373.1

Profit margin, % 11.6 11.4 11.1 11.5 10.7

INTEREST-BEARING NET DEBT

Interest-bearing provisions and loan liabilities less cash and cash equivalents.


Provisions for pensions 236.5 192.3 196.9

Overdraft facilities — — —

Loans 789.0 860.1 822.4

Lease liability 160.3 0.0 0.0

Bank balances -474.6 -361.8 -371.4

Interest-bearing net debt 711.2 n/a 690.6 n/a 647.9

INTEREST-BEARING NET DEBT/EBITDA

Interest-bearing net debt in proportion to operating profit before depreciation/amortization and impairment.


Interest-bearing net debt 711.2 690.6 647.9

EBITDA, rolling 4 quarter 560.0 477.2 497.4

Interest-bearing net debt/EBITDA 1.27 n/a 1.45 n/a 1.30


28

ROOC

EBITDA as a percentage of operating capital as below.

Group, SEK M 9 months 2019 9 months 2018 Full-year 2018

VBG Truck Equipment

Inventories 129.3 117.0 117.7

Trade receivables 147.4 135.2 138.9

Trade payables –49.6 –54.3 –42.8

Working capital 227.0 197.9 213.8


Operating capital 339.3 282.9 300.7

EBITDA, rolling four quarter 232.0 191.0 191.4

Average operating capital four quarter 357.2 291.1 296.9

ROOC, % 65.0% 65.6% 64.5%

Edscha Trailer Systems

Inventories 47.1 51.9 51.6








ROOC, % 29.6% 39.5% 41.7%


Inventories 395.0 325.9 328.4


Trade payables –165.6 –171.7 –140.8






ROOC, % 30.6% 39.9% 38.6%

Ringfeder Power Transmission

Inventories 139.9 135.4 139.0








ROOC, % 25.0% 27.3% 27.9%

VBG Group

Inventories 711.2 628.4 634.9


Trade payables –239.0 –256.5 –212.7

Working capital 1,008.4 899.4 913.3


Operating capital 1,542.7 1,248.7 1,261.8


Average operating capital four quarter 1,555.8 1,250.6 1,193.1

ROOC, % 36.0% 38.2% 41.7%


29

IndiaMOBILE CLIMATE CONTROL THERMAL INDIA PVT. LTD.Plot No. 4BRoad No.2, Phase-IKIADB Industrial Area NarasapuraKolar – 56313, Karnataka

BrazilMCC DO BRASIL LTDARua Silverio Finamore, 920-Gp 3Louveira- SP, 13.290-000Tel +55 19 3878 2058


GermanyRINGFEDER POWER TRANSMISSION GMBHWerner-Heisenberg-Straße 18 DE-64823 Groß-UmstadtTel +49 6078 9385-0

RINGFEDER POWER TRANSMISSION TSCHAN GMBHPostfach 2166DE-66521 NeunkirchenTel +49 6821 866 0

Czech RepublicRINGFEDER POWER TRANSMISSION S.R.O. Oty Kovala 1172CZ-33441 DobranyTel +420 377 201 511

USARINGFEDER POWER TRANSMISSION USA CORPORATION165 Carver AvenueWestwood, N.J. 07675Tel +1 201 666 3320

IndiaRINGFEDER POWER TRANSMISSION INDIA PRIVATE LTD.Plot No. 4, Door No. 220Mount Poonamallee High RoadKattuppakkamChennai-600056Tel +91 44 2679 1411

ChinaKUNSHAN RINGFEDER POWER TRANSMISSION CO., LTD.No. 406, Jiande RoadZhangpu 215321Kunshan, Jiangsu ProvinceTel +86 512 5745 3960

BrazilHENFEL INDÚSTRIA METALÚRGICA LTDA.Major Hilario Tavares Pinheiro, 3447 Cep 14871 - 300Jaboticabal, SPTel +55 16 3209 3422

VBG TRUCK EQUIPMENT

Sweden VBG GROUP TRUCK EQUIPMENT AB Box 1216SE-462 28 VänersborgTel +46 521 27 77 00

GermanyVBG GROUP TRUCK EQUIPMENT GMBHPostfach 13 06 55DE-47758 KrefeldTel +49 2151 835-0

DenmarkVBG GROUP SALES A/SIndustribuen 20–22DK-5592 EjbyTel +45 64 46 19 19

NorwayVBG GROUP SALES ASPostboks 94 LeirdalNO-1009 OsloTel +47 23 14 16 60

UKVBG GROUP SALES LIMITEDUnit 9, Willow CourtWest Quay Road, Winwick QuayWarrington, Cheshire WA2 8UFTel +44 1925 23 41 11

BelgiumVBG GROUP TRUCK EQUIPMENT NVIndustrie Zuid Zone 2.2Lochtemanweg 50BE-3580 BeringenTel +32 11 60 90 90

USAONSPOT OF NORTH AMERICA, INC.P.O. Box 1077North Vernon, IN 47265-5077Tel +1 800 224 2467

Branch:555 Lordship BlvdStratford, CT 06615-7124Tel +1 800 766 7768

FranceONSPOT E.U.R.L14 Route de SarrebruckFR-57645 Montoy-FlanvilleTel +33 387 763 080


Germany EUROPEAN TRAILER SYSTEMS GMBHIm Moerser Feld 1fDE-47441 MoersTel +49 2841 6070 700

Czech RepublicEUROPEAN TRAILER SYSTEMS S.R.O.Ke Gabrielce 786CZ-39470 Kamenice nad LipouTel +420 565 422 402

VBG GROUP

SwedenVBG GROUP AB (PUBL) Kungsgatan 57SE-461 34 TrollhättanTel +46 521 27 77 00www.vbggroup.com


SwedenMOBILE CLIMATE CONTROL GROUP HOLDING ABKungsgatan 57SE-461 34 TrollhättanTel +46 521 27 77 00

MOBILE CLIMATE CONTROL SVERIGE ABSikvägen 9SE-761 21 NorrtäljeTel +46 8 402 21 40

GermanyMOBILE CLIMATE CONTROL GMBH Jägerstraße 33DE-712 72 RenningenTel +49 715 993 087–0

CanadaMOBILE CLIMATE CONTROL INC.7540 Jane St.Vaughan, OntarioL4K 0A6Tel +1 905 482 2750

MOBILE CLIMATE CONTROL INC.6659 Ordan DriveMississauga, OntarioL5T 1K6Tel +1 905 482 2750

USAMOBILE CLIMATE CONTROL CORP.P.O. Box 803Goshen, Indiana 46527Tel +1 574 534 1516

MOBILE CLIMATE CONTROL CORP.3189 Farmtrail RoadYork, PA 17406Tel +1 717 767 6531

MOBILE CLIMATE CONTROL CORP.27 Corporate Circle Suite 1East Syracuse, NY 13057Tel +1 315 434 1851

PolandMOBILE CLIMATE CONTROL S.P.Z.OOUl. Szwedzka 155-200 OławaTel +48 71 3013 701

ChinaNINGBO MOBILE CLIMATE CONTROL MANUFACTURING/TRADING CO., LTDNo.88, Jinchuan Rd.,Zhenhai, Ningbo, 315221Tel +86 574 863 085 77

South AfricaMCC AFRICA PTY (LTD)Unit 7B, Rinaldo Industrial Park50 Moreland Drive, Red Hill4071 DurbanTel +27 31 569 3971

vbg group interim report january–september 2019

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